i Statutory provisions and public enforcers
The main statutory provisions in Norway are enshrined in the Competition Act of 2004 (CA). The substantive provisions of the CA mirror Articles 101 and 102 TFEU and Articles 53 and 54 EEA Agreement by, first, prohibiting cartels and anticompetitive agreements, and secondly, abuse of a dominant position. Norway is not a member of the European Union, but it is party to the EEA Agreement. Thus, Norway has implemented the EU and EEA competition rules and internal market rules, and has a state aid regime similar to that of EU Member States (Article 61 EEA Agreement mirrors Article 107 TFEU).
The main public enforcer of the CA is the Norwegian Competition Authority (NCA). Decisions adopted by the NCA can be appealed to the Competition Appeals Tribunal prior to being brought before the Norwegian appellate courts. The NCA is not a formal member of the European Competition Network, although having informal points of contact.
The public enforcers of the provisions of the EEA Agreement are, in addition to the NCA, the European Commission and the EFTA Surveillance Authority (ESA). ESA is particularly important in relation to enforcement of the state aid provisions and Article 59 EEA Agreement (the award of special or exclusive rights – mirroring Article 106 TFEU). Decisions adopted by ESA can be challenged before the EFTA Court. Due to the case allocation rules of the EEA Agreement, ESA does not deal with merger cases or cartel cases affecting EU Member States.
ii NCA enforcement: 2019 overview and 2020 outlook
In 2019, the NCA adopted three substantive final decisions, all three being merger cases. One of the decisions was the NCA's first ever decision relating to a non-controlling minority shareholding. On general enforcement, the NCA increased its surveillance of the Norwegian groceries sector, inter alia, by carrying out a dawn raid and issuing a sector report.
Public enforcement of the NCA 2014–2018
|Mergers – notifications||96||97||103||111||107|
|Mergers – interventions||5||3||1||2||3|
|Mergers – breach of standstill||2||0||1||0||0|
|Section 10 decisions (cartel provision)||2||1||2||0||0|
|Section 11 decisions (abuse of dominance)||0||0||0||1||0|
|Section 9e (challenges of public regulations)||0||0||0||0||1|
|Dawn raids (publicly known)||1||1||3||2||2|
According to the Norwegian government's policy instructions in the 2020 budget letter, the NCA's 2020 enforcement focus will particularly target competition in the grocery sector. The reason is that the Norwegian grocery sector is allocated between a few large chains. Moreover, due to the Norwegian customs regime for foodstuffs, it has proven challenging for foreign grocery chains to penetrate the Norwegian market. This focus on the groceries sector is continued from 2018 throughout 2019, and the NCA carried out dawn raids in this sector both in 2018 and 2019.
ESA enforcement: 2018 overview
The EFTA Surveillance Authority (ESA) adopted nine final state aid decisions related to Norway in 2019; five 'no objection' decisions and four 'no aid' decisions – with no decisions in 2019 on unlawful aid. The number of aid measures reviewed by ESA has drastically decreased since the entering into force of the GBER with 44 GBER information sheets related to Norway submitted in 2019, concerning 33 cases. With regard to enforcement priorities, it should be noted that Regulation 2015/1589, establishing a possibility to prioritise state aid complaint cases, has yet to be incorporated into the EEA Agreement.
ESA adopted no competition law decisions and opened no proceedings in 2019. However, ESA is currently undertaking two major investigations:
- in parallel to the NCA, ESA has one major pending abuse of dominance case against Telenor in the telecoms sector pursuant to Article 54 EEA, and in this case ESA issued a supplementary statement of objections in June 2019; and
- ESA issued a statement of objections against Widerøe, a regional air carrier in Norway, for abusing its dominant position in 2018. This case is still pending.
ESA is in practical terms to some extent 'a second NCA' for Norway; that is, the EFTA and EEA States are Iceland and Liechtenstein, in addition to Norway. Thus, ESA's focal point is often (markets in) Norway, in contrast to the European or global competition scope of the European Commission.
iii Global public enforcement against Norwegian entities
On the global arena one Norway-linked case has stood out in recent years: the Maritime Car Carrier case. In this case, relating to the pure car truck carrier shipping sector, investigations have been opened in all major global jurisdictions, including the EU, the US and Japan. This case has reached its conclusions in most jurisdictions.
In 2019, a new global dossier surfaced – a global cartel case with alleged nexus in Norway: The Farmed Atlantic Salmon case against, inter alia, the Norwegian companies Mowi ASA, Grieg Seafood AS and SalMar ASA. Since salmon is not covered by the EEA Agreement, the European Commission has no jurisdiction to carry out dawn raids in Norway; however, inspections were carried out at the companies' EU-located units in Scotland and the Netherlands. In the wake of the EU investigations, court proceedings have also been initiated in the US, and the US Department of Justice opened criminal proceedings in November 2019.
iv Private enforcement
On the legislative side, Directive 2014/104/EU on antitrust damages actions has yet to be incorporated into the EEA Agreement and implemented into Norwegian law. This is due to institutional issues that are unlikely to be solved in the near future. However, existing general Norwegian law mirrors roughly the provisions of the Directive.
The key private enforcement case in 2019 was the Kristoffersen case. In this case, the world-renowned slalom skier Henrik Kristoffersen challenged the sporting community framework in relation to the scope of an athlete's economic rights pursuant to EU and EEA law. The key novel issue is that the EFTA Court, in its judgment in case E-8/16 of 16 November 2018, acknowledged that a restriction on an athlete's marketing rights is only lawful if that restriction pursues a legitimate aim, and such a legitimate aim can only be the principle of solidarity aiming at channelling economic means also to recruitment, education and children's and recreational sports. The Oslo District court ruled in the sporting communities favour in a judgement of May 2019. The parties settled out of court prior to appeal.
In a case related to the global Trucks cartel, the Norwegian Supreme Court ruled on 27 November 2019 that an action for claims for damages related to an international cartel with effects in Norway can be brought forward in Norwegian courts. The decision is unsurprising. It remains, however, to be seen whether such actions in cartel cases touching on several jurisdictions will increase in Norway as most claimants – also Norwegian claimants – would usually prefer to argue a case in more claimant-friendly jurisdictions (regarding rules on evidence, quantification of damages, etc.).
The substantive cartel provision in Section 10 of the CA mirrors Article 101 TFEU and Article 53 EEA Agreement, except for the criterion related to effect on trade between EEA States. Thus, Section 10 CA prohibits agreements and concerted practices that have an anticompetitive object or actual or potential restrictive effect on competition. Judgments of the European Union Court of Justice (EUCJ) and the EFTA Court are directly relevant legal sources in the interpretation and application of the provision.
The leniency policy pursuant to the CA is similar to that of Regulation 1/2003 in the EU, including the possibility of obtaining a marker:
- the first applicant may be granted full immunity from administrative fines;
- the second company may be granted a 30 to 50 per cent reduction;
- the third company may be granted a 20 to 30 per cent reduction; and
- subsequent companies may be granted a reduction in fines of up to 20 per cent.
In contrast to the EEA Agreement provisions, cartel behaviour in breach of the CA can also trigger criminal sanctions, including fines and ultimately imprisonment of individuals, in theory of a duration of up to six years in aggravating circumstances. On the one hand, criminal sanctions have yet to be applied in a cartel case in Norway, not to mention criminal sanctions against individuals. On the other, the NCA adopted specific guidelines in 2016 on criteria when they will consider reporting an individual offence to the Public Prosecution's office, and the instructing ministry has requested the NCA to consider imposing criminal sanctions on individuals in future cases. The leniency programme is not available to individuals. However, it is possible to anonymously enquire at the NCA whether they will request criminal sanctions against individuals as a prejudgment decision.
There is a settlement procedure available pursuant to the CA mirroring that of Regulation 1/2003, possibly reducing an administrative fine by 10 per cent. The provision entered into force in 2016 and has yet to be applied.
i Significant cases
The NCA adopted no cartel decisions in 2019.
Verisure/Sector Alarm – statement of objections
The NCA issued a statement of objections in June 2019 against two home alarm companies. The NCA's preliminary assessment was that the companies had cooperated by agreeing not to approach each other's customers for the years 2011 to 2017. The NCA has indicated fines of 784 million kroner and 423 million kroner to Verisure and Sector Alarm, respectively. One of the parties, Sector Alarm, has already accepted the fine but has not admitted illegal collusion. A final decision is expected in 2020.
The only significant case reaching beyond Norway is the Farmed Atlantic Salmon case mentioned above. This case is being looked into by, inter alia, the European Commission and the US Department of Justice, albeit as publicly known not the NCA (recalling that the NCA still has jurisdiction since fisheries are not covered by the EEA Agreement).
The NCA carried out cartel dawn raids in two cases in 2019, in total at five different companies.
One of the dossiers is related to the ongoing surveillance of the groceries sector. In this sector, the NCA carried out a dawn raid in Spring of 2018 – and this dawn raid was followed by a second raid in November 2019. The investigation relates to prices and rebates between producers and the (few) groceries chains. In the wake of the November 2019 dawn raid, the NCA published a report on purchasing conditions for the grocery chains, showing considerable price differences in the Norwegian groceries sector. The NCA collected price information from 16 suppliers in total, analysing prices of about 2,900 products. The report showed that several suppliers offer the grocery chains Rema 1000, Coop and Norgesgruppen different purchasing conditions. In some cases, some suppliers operate with price differences of more than 15 per cent on products they sell to the grocery chains. The Norwegian groceries sector is highly concentrated, but the NCA has not made the exact scope of their investigation public.
The other dawn raid in 2019 was related to alleged bid-rigging in the recycling sector. The NCA later closed this case, in October 2019.
In October 2019, the NCA stated that it opened an investigation of possible anticompetitive practices in the retail fuel market. The NCA has followed this market closely for several years. As part of its monitoring, the NCA has requested market players submit market data twice a year, including their prices, sales volumes and purchasing terms. The initiation of the investigation was based on findings from the NCA's market monitoring of this market. There is no publicly available information on any dawn raid relating to these investigations.
Neither the European Commission nor ESA carried out any cartel dawn raids in Norway in 2019. However, as mentioned, the European Commission carried out dawn raids in February 2019 against units located in the EU of Norwegian companies in the Farmed Atlantic Salmon case.
ii Trends and outlook
If one were to identify one sector during 2020 and beyond, it is the groceries sector. Apart from the investigations in this sector, the NCA has to a large degree allocated its limited enforcement resources to merger control.
III ANTITRUST: RESTRICTIVE AGREEMENTS AND DOMINANCE
Section 10 of the CA mirrors Article 101 TFEU and Article 53 EEA Agreement. Moreover, Section 11 of the CA mirrors Article 102 TFEU and Article 54 EEA Agreement. Thus, Section 11 CA prohibits a company's unilateral abuse of a dominant position.2 Judgments of the EUCJ and the EFTA Court are directly relevant legal sources in the interpretation and application of the provisions.
Regarding public enforcement tools, the CA includes the possibility of commitment decisions mirroring that of Regulation 1/2003 in the EU.
i Significant cases
Four (ongoing or decided) cases merit mention.
Telenor abuse case – telecom
On 21 June 2018, the NCA adopted an abuse case (Article 54 EEA/Section 11 CA) decision to fine the Norwegian telecom incumbent Telenor 788 million Norwegian kroner.3 This is the highest competition law fine ever imposed by the NCA. The case relates, in essence, to an alleged abuse by Telenor of its dominant position by engaging in conduct that impeded the entry of a third mobile network in Norway. Norway has been one of very few countries in Europe with only two mobile operators with own nationwide mobile networks, with Telenor as the dominant player. Mobile operators without their own network have to rent access to either Telenor's or Telia's network. Due to the lack of effective competition, Norwegian authorities still regulate the Norwegian mobile wholesale market. Therefore, the development of a third mobile network was key to achieving increased competition in this market. In 2007, Network Norway started the construction of a third mobile network together with Tele2. During the rollout of the network, Network Norway bought access to Telenor's network in the areas where the third mobile network did not yet have coverage. In 2010, Telenor changed the conditions in its network access agreement with Network Norway. It is in this regard that the NCA has found that Telenor abused its dominant position. Through the new agreement Telenor reduced the cost for the actual use of Telenor's network, but at the same time introduced a fee that increased with the number of Network Norway's end users. This fee was a cost that Network Norway could not avoid by increasing the use of its own network. This reduced Network Norway's incentives to continue the rollout of the third mobile network. The NCA decision was appealed by Telenor to the Competition Appeals Tribunal, which upheld the decision in a decision of 19 June 2019. This decision has been challenged at the courts, and the case is currently pending at the Gulating appellate court.
Ringnes abuse case
The NCA carried out a dawn raid at Ringnes, a brewery in the Carlsberg group, in 2017. No case information has been disclosed throughout 2018 and 2019. However, it has surfaced that the NCA has been concerned that agreements concluded by Ringnes with pubs and restaurants may have hindered other suppliers from selling beer to these pubs and restaurants, thereby weakening competition in the market in breach of Section 11 of the Competition Act prohibiting abuse of a dominant position. Ringnes proposed commitments, which were made public early 2020. According to the proposed commitments, Ringnes cannot require pubs and restaurants to buy all or a given minimum share of their requirements for beer from Ringnes. The proposed commitments also contain limitations on what kind of rebates Ringnes can include in its agreements. Finally, Ringnes must, if needed, surrender physical space in pubs and restaurants to beer from competitors. It is expected that the NCA will adopt a commitment decision based on the proposed commitments later in 2020, being the first ever commitment decision in an abuse case in Norway.
Widerøe case – aviation
On 2 May 2018 ESA adopted a statement of objections informing Widerøe's Flyveselskap AS (Widerøe) of its preliminary conclusion that Widerøe may have abused a dominant position in Norway in breach of Article 54 EEA. Previously, airlines needed a specific satellite-based approach system to compete in public tender processes to service several Norwegian PSO routes. The system is called SCAT-1 and was installed at many regional airports in Norway for safety reasons. At the airports where this system was installed, PSO aircraft were required to have certain SCAT-1 receivers on board. Widerøe owns all of the available receivers. ESA's preliminary view is that Widerøe infringed Article 54 EEA by refusing to supply the SCAT-1 receivers to possible competitors. Consequently, according to ESA, Widerøe appears to have been the only airline able to win a number of the PSO tenders. The case is still ongoing.
Telenor abuse cases – telecom
On 1 February 2016, ESA sent a statement of objections to Telenor. The case concerns Telenor's conduct in three Norwegian markets: the market for wholesale mobile access and origination services, the market for mobile broadband services to residential customers and the market for mobile communications services to business customers. ESA takes the preliminary view that Telenor's pricing of access and origination services at the wholesale level likely impeded competing offers in the market for mobile broadband services to residential customers. In the market for mobile communications services to business customers, ESA is concerned that clauses in Telenor's contracts have impeded competition by making it very difficult for its customers to switch provider and by making it overly expensive for competitors to capture customers from Telenor.
On 24 June 2019, ESA issued a supplementary statement of objections to Telenor. On grounds of priority, ESA is now focusing its investigative efforts on the margins available to competitors in mobile broadband services offered to private users. ESA discontinued the part of the investigation into breakage fees and clauses in Telenor's contracts with business users. The case is still ongoing.
Neither the NCA or ESA has published any information related to dawn raids in abuse cases in 2019.
ii Trends and outlook
In the 2018 Telenor case, the NCA has finally adopted a decision pursuant to Section 11 CA (abuse of dominance), a provision introduced into Norwegian law by the entering into force of the CA in 2004. Until the 2018 Telenor decision the NCA had not taken any abuse case decisions which were not later settled or quashed by the courts. (Two major cases that were settled or quashed are the SAS case of 2005 and the Tine case of 2011.) Thus, irrespective of the Telenor decision in 2018, it is safe to say that the enforcement of abuse of dominance cases by the NCA is low.
ESA has successfully enforced the similar provision of the EEA Agreement (Article 54) on several occasions, of particular note in the Posten case of 2010 (fines of approximately €11 million) and the Color Line case of 2013 (fines of approximately €19 million).
With regard to the application of Section 10 to vertical agreements, it could be noted that the NCA has not adopted any such decision after the entering into force of the CA in 2004.
IV SECTORAL COMPETITION: MARKET INVESTIGATIONS AND REGULATED INDUSTRIES
i Market liberalisation
The government's efforts on liberalisation are aimed at particular two markets: rail passenger transport services and air navigation services.
Rail passenger transport services
The market pillar of the EU Fourth Railway Package will make it compulsory for EEA countries to open the market for domestic passenger services by December 2019, while competitive tendering for PSO will be obligatory in the majority of cases from December 2023. The government has already 'unbundled' train operations and infrastructure management, and has initiated the deregulation of the Norwegian market by way of placing various routes on tender through a phasing-in period from 2017 to 2022.
Air navigation services
The government has conveyed, although not particularly forcefully, that the markets for air navigation services will be liberalised. It has also stated that the incumbent service provider and owner of most of the airports in Norway, Avinor, may await the introduction of remote towers prior to placing the services on competitive tendering. Thus, it may take many years before the market is opened to other air navigation service providers.
ii Regulated industries
As in other EEA countries, as pursuant to EU and EEA secondary legislation, electronic communications (including telecoms), the power industry and the postal sector are subject to additional sector-specific competition rules. The enforcement of these provisions did not raise particularly noteworthy issues in 2019.
As applicable to the groceries sector, the Norwegian government proposed a new Act on Unfair Trading Practices in this sector in December 2019. The proposal includes provisions on (1) standards for best practice; (2) requirements for complete agreements in writing; (3) sharing of information; (4) protection of business secrets; (5) protection of legitimate expectations in relation to investments made; (6) delisting notices; and (7) the establishment of an enforcement authority. In parallel, the EU adopted a Directive on unfair trading practices in business-to-business relationships in the agricultural and food supply chain in April 2019. It is still to be decided whether the Directive is to be incorporated into the EEA Agreement (i.e., the agricultural sector is as such not part of the EEA Agreement but the Directive's marketing rules for the food supply chain as relating to the retail and groceries level may be incorporated). If so, the (relevant parts of the) Directive will likely be implemented in Norway as a separate Chapter in the proposed Act on Unfair Trading practices or as a Regulation pursuant to the Act.
iii Trends and outlook
As previously mentioned, the NCA has a draconian focus, indeed as instructed by the government, on competition in the grocery sector. The background to this can be found in the fact that the Norwegian grocery sector is apportioned between a very few large chains with the attendant high risk of suboptimal competition. Moreover, due to the Norwegian customs regime for foodstuffs, it has proven challenging for foreign grocery chains to penetrate the Norwegian market. The NCA has, as mentioned, carried out two dawn raids in this sector, in April 2018 and November 2019, respectively.
V STATE AID
Although not part of the EU, Norway has a state aid regime similar to that of EU Member States (i.e., Article 61 EEA Agreement mirrors Article 107 TFEU). Thus, the EEA Agreement prohibits state aid in order to prevent distortions of competition and negative effects on trade.
The prohibition is, however, subject to exemptions, recognising that government intervention can be necessary to correct market failure and for other purposes. To benefit from these exemptions the government must, as a rule, notify aid measures to ESA for prior approval. Aid measures may be implemented without prior approval when they comply with the General Block Exemption Regulation (GBER) or other specific rules. The main piece of Norwegian legislation on state aid, in addition to the main parts of the EEA Agreement having been incorporated into Norwegian law, is the State Aid Act of 1992. All procedural rules and the EEA block exemptions have been implemented into Norwegian law as part of the State Aid Act. Similar to the EU model, ESA may request that illegal and incompatible state aid is recovered from Norwegian beneficiaries.
ESA has substantial resources enabling it to monitor the Norwegian market. Regarding ESA enforcement versus European Commission enforcement, there is, however, one key difference: Regulation No. 734/2013 has, for institutional reasons, yet to be incorporated into the EEA Agreement. Thus, ESA's competences follow from the previous regulation, Regulation No. 659/99. The effects are, inter alia, that ESA cannot prioritise complaint cases in the same degree as the European Commission; nor can ESA request market information pursuant to the rules of Regulation No. 734/2013. That said, most cases are in any event notification cases that ESA has to handle within the applicable deadlines.
Moreover, a key observation from a factual perspective is that ESA is only monitoring Norway, Iceland and Liechtenstein, enabling ESA to allocate significant resources to the Norwegian market. In addition, Norway has a public affairs sector that in relative terms is much larger than that of most other countries.
With regard to private enforcement, national courts are empowered to enforce, inter alia, the state aid standstill provision and the block exemption provisions. However, private enforcement of the state aid framework has so far been limited in Norway.
i Significant cases
ESA adopted nine final state aid decisions related to Norway in 2019; five 'no objection' decisions and four 'no aid' decisions – with no decisions in 2019 on unlawful aid. The number of aid measures reviewed by ESA has drastically decreased since the entering into force of the GBER with 44 GBER information sheets relating to Norway submitted in 2019, relating to 33 cases. The main areas for state aid in Norway are regional aid, aid to promote and make environmentally friendly solutions competitive, aid to CO₂ capture technology related to oil and gas exploration, and aid to shipping in the form of a special tax regime. Two significant cases from 2019 are as follows.
Petroleum tax reimbursement case
Based on a complaint by Bellona, an environmental non-profit organisation, in 2018 and 2019 ESA looked into parts of the Norwegian petroleum tax scheme (i.e., the reimbursement system for exploration costs). Due to the extraordinary returns on production of petroleum resources, oil companies are subject to an additional special tax. In 2019, the ordinary company tax rate was 24 per cent and the special tax rate was 54 per cent, generating a marginal Norwegian petroleum tax rate of 78 per cent. The reimbursement system for exploration costs was introduced to reduce entry barriers and encourage economically viable exploration activity. Under the system, companies that are making a loss may choose between requesting an immediate refund of the tax value of exploration costs from the taxation authorities and carrying forward the losses to a later year when the company has a taxable income. If a company chooses the immediate payment option, the exploration costs cannot be deducted from income in later tax assessments. In a decision of 20 March 2019 (018/19/COL) ESA arrived at the conclusion that the measure is not selective. ESA found that the measure is available to all companies on an equal footing. According to EEA state aid rules, a measure that is not selective does not constitute state aid.
Public broadcasting: TV 2 state agreement
In September 2018, the Norwegian Ministry of Culture entered into an agreement with TV 2, giving the latter compensation for being a commercial public service broadcaster. In December 2018, ESA received a complaint from the media company Discovery that the agreement was in breach of the EEA state aid rules. According to the agreement, TV 2 shall broadcast daily news on its main channel, Norwegian-language children's programmes on the weekends and invest in Norwegian film and drama. The aim is to ensure media pluralism, production of news outside of the Oslo area and an alternative to the public broadcaster NRK. TV 2 receives up to 135 million kroner a year for these services. There is a specific block exemption for state aid for services of general economic interest. Compensation for these services is considered to be compatible with the EEA Agreement and exempt from notification to ESA if it meets certain criteria and does not exceed the net costs including a reasonable profit, for performing the services. In a decision of 13 December 2019 (098/19/COL), ESA concluded that the agreement between TV 2 and the Ministry of Culture meets the criteria in the block exemption. The agreement is, therefore, block exempted and the complaint is rejected as unfounded.
ii Trends and outlook
With regard to enforcement priorities, Regulation 2015/1589, transferring a possibility on ESA to prioritise state aid cases, has yet to be incorporated into the EEA Agreement. However, ESA has in an unofficial capacity stated that it will, within the existing legal framework, not prioritise small cases not affecting competition in the marketplace to any appreciable degree: it will, inter alia, not prioritise complaint cases related to public sales of minor properties allegedly at below market price.
Another trend is the increased use of GBER block-exempted aid. The purpose of the GBER, introduced in 2014, is that only larger, more distortive and complex cases will remain subject to prior notification and detailed scrutiny by ESA. Within the scope of the GBER, the requirement is that larger aid awards are published on a publicly available website, and certain schemes require an evaluation plan under which ESA conducts monitoring exercises.
The focus of individually notified aid is on regional aid to Norway's outermost regions, aid to support the shift from being an oil and gas-producing country, and aid to support environmentally friendly choices.
Many European countries provide aid to promote the use of renewable energy in households. In Norway, however, renewable energy already accounts for 99 per cent of the total electricity production (mostly hydropower: almost 50 per cent of Europe's hydropower capacity is in Norway) Thus, this is not a focus of aid in Norway.
The agricultural sector is aid-intensive in Norway. This sector (as well as the fisheries sector) is, however, not covered by the EEA Agreement. Thus, agricultural aid in Norway is monitored only by national political control.
VI MERGER REVIEW
Section 18 et seq. of the CA requires that concentrations meeting certain thresholds are notified to the NCA. Thus, concentrations where the undertakings concerned have a combined annual turnover in Norway exceeding 1 billion kroner must be notified, unless only one of the undertakings concerned has an annual turnover in Norway exceeding 100 million kroner.
Since the CA entered into force in May 2004, the NCA has intervened in 50 cases, of which 16 concentrations have been prohibited.
The procedure pursuant to the CA reflects roughly the EU Merger Regulation, albeit with substantially shorter pre-notification discussions. The main features are as follows: Phase I lasts 25 working days. A standard standstill prohibition applies until approval. There is no deadline for notifying a concentration. Concentrations that are unlikely to affect competition may be notified by a short-form notification, with market share thresholds mirroring the DG COMP Short Form CO. The notion of a 'concentration' mirrors that of the EU Merger Regulation, and the same holds true for the substantive test: the significant impediment of effective competition test. The Competition Authority publishes a notice of all notified concentrations on its website.
During 2019, the NCA concluded in 111 cases and received 107 (new) merger notifications. Some 110 cases were approved in Phase I. Three cases triggered an intervention by way of approvals subject to conditions (two cases) and an outright prohibition (one case).
Although Norway is not an EU Member State, it is covered by the one-stop shop of a Form CO filing to the European Commission pursuant to the EUMR. Two key particularities are that turnover in Norway (EFTA) is not relevant for the assessment of the European Commission's jurisdiction, and the European Commission's jurisdiction only covers products and services covered by the EEA Agreement (Article 8). Thus, exceptions include, inter alia, agricultural products, which may require a separate filing in Norway if national jurisdictional thresholds are met.4 There are also additional EEA and EFTA particularities in relation to the referral procedures between the European Commission and the NCA.
i Significant cases
Non-controlling minority shareholding: The Alarm case (Sector Alarm/Nokas) – conditions
In March 2019, the NCA adopted its decision in Sector Alarm Group AS/Nokas AS – the NCA's first ever decision related to a non-controlling minority shareholding.5 The case addressed home alarm markets in Norway. These markets are highly concentrated with mainly two players: Sector Alarm and Verisure (see also the SO in the 2019 cartel case between the same companies mentioned above). The contemplated transaction was based on Sector Alarm acquiring a 49.9 non-controlling stake in Nokas. Nokas could be perceived as a small 'maverick' for house alarms in Norway. The case was closed based on commitments related to a reduced ownership threshold of 25 per cent by Sector Alarm in Nokas and that Sector Alarm would not acquire the company Nokas Small Systems.
IT services: The Tieto/Evry merger approved, subject to conditions
The NCA announced 1 November 2019 that the merger between Tieto Oyj and Evry ASA, notified to the NCA on 15 September 2019, was approved subject to remedies.6 Both Tieto and Evry provides software and related IT services in Norway, with appreciable horizontal overlaps in the segment for e-case files and e-archives for the public sector. The parties proposed as a remedy that Evry's activities in this segment would be divested to an independent suitable buyer prior to completion of the transaction. Against this background, the transaction was approved 35 days after notification. The company Karbon Invest AS was approved as a new owner of EVRY's archives business in a separate NCA decision of 29 November 2019,7 and the standstill obligation on the merging parties was subsequently lifted.
Offshore accommodation services: Prosafe's acquisition of Floatel blocked
On 28 October 2019, the NCA issued a decision prohibiting Prosafe SE's acquisition of Floatel International Limited.8 According to the NCA, the contemplated transaction involved the two largest and closest competitors on the Norwegian market for offshore accommodation services: Prosafe and Floatel. Prosafe and Floatel are the only suppliers of modern semi-submersible accommodation units on the Norwegian continental shelf. Accommodation units offered by other suppliers on the Norwegian continental shelf are, in the opinion of the NCA, not fully comparable to those offered by the parties. Other suppliers are, therefore, not able to compete for all contracts. During the investigation, Prosafe proposed remedies with a view to remove the negative effects on competition that would result from the merger. However, the NCA's assessment was that the remedies as proposed were not sufficient to eliminate the competition concerns identified. The decision has been appealed and is currently pending review at the Competition Appeals Tribunal.
ii Trends and outlook
The NCA has for many years focused on competition in local markets, which has led to a higher number of prohibition decisions than in comparable jurisdictions with a more neutral focus. The same focus has led the NCA to have one of the highest global ratios of prohibition decisions compared to the number of launched Phase II investigations. In 2019, one in three interventions was a prohibition decision.
Most of the NCA's internal enforcement resources are allocated to merger control, with the effect that complex cases under Sections 10 and 11 (Articles 101 and 102 TFEU cases) are usually not subject to an in-depth investigation. One key exception is the NCA's focus on the groceries sector.
The NCA's 2020 enforcement focus will, as in 2019, particularly target competition in the grocery sector.
On merger control, the NCA has retained its focus on local markets, which likely will generate outright prohibition decisions in cases raising concerns. It remains to be seen whether the NCA's approach will be endorsed by the Competition Appeals Tribunal.
The most noteworthy antitrust case globally is the Atlantic Farmed Salmon case, with a nexus in Norway and ongoing investigations by, inter alia, the European Commission and the US Department of Justice.
The most significant issue in relation to public enforcement of the state aid rules is the increased use of block-exempted aid pursuant to the GBER.
No major, material changes to the CA are expected in 2020.
1 Odd Stemsrud is a partner at Advokatfirmaet Grette AS.
2 The provision also prohibits abuse of collective dominance as that concept is enshrined in EU and EEA competition law.
3 NCA decision V2018-20.
4 See, e.g., the decision in M.7015, Bain Capital/Altor/Ewos, Section 4 Paragraph 8.
5 NCA decision V2019-17 of 28 March 2019.
6 NCA decision V2019-23 of 1 November 2019.
7 NCA decision V2019-24 of 29 November 2019.
8 NCA decision V2019-22 of 28 October 2019.